Released August 23, 2023 | SUGAR LAND
en
Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Last weekend, Ecuadorians took to the polls to support, with 59% of the vote, the end of Block 43 oil operations near the Amazon Yasuni reserve. This forest area is the home of hundreds of fauna and flora and indigenous populations that want to remain untouched.
Disputes over oil production in the area have taken place for years, though it was only this year that the judiciary granted the vote on whether to close the asset.
Block 43 is operated by state-run Petroecuador (Quito, Ecuador). The block comprises the Ishpingo, Tambococha, and Tiputini oil fields, known as ITT. The oil fields currently produce 60,000 barrels per day (BBL/d). In a statement, Petroecuador said that it would accept the referendum results.
This represents an operational and production setback for the company as it has been trying to increase production in the last few years. In the first 17 days of this month, Petroecuador was producing 392,000 BBL/d, based on the government's data.
The closure of Block 43 includes significant commercial and financial losses for the company and Ecuador as a whole. In a presentation last March, Ramon Correa, Petroecuador's general director, highlighted that US$16.47 billion could be lost if the ITT fields closed.
About $467 million would be in losses related to the abandonment of the fields, including the closure of the fields and removal of equipment from the area. Another US$251 million would be destined for compensations for the next 20 years, while US$1.95 billion in investments made at the block would also be forfeited. Finally, some US$13.8 billion would represent revenue losses for the stoppage of production over the next two decades.
During the May presentation, Correa said, "assuming that the consultation says no more activity in block 43. We have to stop wells, and after that, we have to leave the field, but it is not that we take the backpack and leave. We have to return the jungle to the condition in which it was. You have to remove pipelines, dismantle facilities, plug the wells... that takes a period of six years."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
Disputes over oil production in the area have taken place for years, though it was only this year that the judiciary granted the vote on whether to close the asset.
Block 43 is operated by state-run Petroecuador (Quito, Ecuador). The block comprises the Ishpingo, Tambococha, and Tiputini oil fields, known as ITT. The oil fields currently produce 60,000 barrels per day (BBL/d). In a statement, Petroecuador said that it would accept the referendum results.
This represents an operational and production setback for the company as it has been trying to increase production in the last few years. In the first 17 days of this month, Petroecuador was producing 392,000 BBL/d, based on the government's data.
The closure of Block 43 includes significant commercial and financial losses for the company and Ecuador as a whole. In a presentation last March, Ramon Correa, Petroecuador's general director, highlighted that US$16.47 billion could be lost if the ITT fields closed.
About $467 million would be in losses related to the abandonment of the fields, including the closure of the fields and removal of equipment from the area. Another US$251 million would be destined for compensations for the next 20 years, while US$1.95 billion in investments made at the block would also be forfeited. Finally, some US$13.8 billion would represent revenue losses for the stoppage of production over the next two decades.
During the May presentation, Correa said, "assuming that the consultation says no more activity in block 43. We have to stop wells, and after that, we have to leave the field, but it is not that we take the backpack and leave. We have to return the jungle to the condition in which it was. You have to remove pipelines, dismantle facilities, plug the wells... that takes a period of six years."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
